On 26 April 2023, an electrical technician (the claimant) lodged a claim against Auscor Pty Ltd (respondent) and its sole director (former second respondent), alleging breaches of both the Fair Work Act 2009 (Cth) (FWA) and the Long Service Leave Act 1958 (WA). The claimant claimed he was an employee entitled to annual leave, public holiday pay, leave loading, and long service leave, which he had not received from the respondent during the period 8 October 2012 to 9 September 2021, totalling $86,674.24. The claimant also sought interest and penalties. Throughout the proceedings, the respondents maintained the claimant was an independent contractor and not entitled to the amounts sought in the claim. On 14 March 2025, after proceedings had continued for almost two years, the claimant discontinued the claim.

On 28 March 2025 the respondent filed an application with the Court (Costs Application) which sought that the claimant pay both the respondent’s and former second respondent’s costs on an indemnity basis from 26 April 2023, to be taxed if not agreed. The respondent also sought their costs on the Costs Application. The respondent sought the order for costs under s 570(2)(a), and alternatively s 570(2)(b), of the FWA. Section 570(2)(a) allows the Court to issue costs where claims are instituted vexatiously or without reasonable cause, while s 570(2)(b) allows costs orders when an unreasonable act or omission by a party has caused the other party to incur costs. The Costs Application was heard on 21 July 2025 before the Industrial Magistrate.

The respondent contented that the claimant instituted the proceedings vexatiously without reasonable cause, stating that the claim was legally hopeless from its inception and that the claimant knew at all times that he had only ever worked for the respondent as a contractor, not an employee. Evidence of this working relationship included the claimant’s own business records, his registration as a sole trader with an Australian Business Number, issuance of tax invoices (charging GST), and tax returns or Business Activity Statement filings declaring business income and claiming significant business expense deductions. The respondent referred to an affidavit, filed by the claimant on 28 February 2024, which they said explained repeated declarations made by the claimant to the Australian Tax Office that the claimant was running his own business for personal services, the business expense tax deductions claimed by the claimant over numerous years, and that the case, contradicted by the claimant’s own documents, had no reasonable prospect of succeeding. Further, the respondent argued the claimant engaged in unreasonable acts and omissions and caused the respondents to incur costs by repeatedly failing to comply with Court orders, made false statements in affidavits and ignored a reasonable walkaway offer of settlement. The respondent said these actions significantly extended the time and costs incurred by the respondents in the proceedings.

The claimant contested that there was no evidence his motive in commencing the claim was anything other than having a genuine belief his contract with the respondent was one of employment and that he was entitled to payment of his claimed entitlements. Although self-represented at the time of the Application, the claimant raised that he had been represented through the proceedings by an industrial agent, and it could be inferred that prior to commencing the claim, he had received advice that his claim had chances of success. He further contested that it could not be said his claim was instituted without reasonable cause. The claimant submitted he had left it to his industrial agent to set out his claim and was not responsible for its content.

After considering the parties’ respective cases and applying principles from the decisions that each party relied upon, the Industrial Magistrate found that the claimant instituted the proceedings without reasonable cause. Her Honour found it was difficult to comprehend how the claimant or his advisors could conclude he had reasonable prospects of success given the evidence overwhelmingly pointed to the claimant being a contractor. Her Honour determined that pursuant to s 570(2)(a) of the FWA, an order requiring the claimant to pay the respondent’s costs in the proceedings from 26 April 2023, on a party and party basis, to be taxed if not agreed, should be issued. Her Honour was satisfied that this should include the respondent’s costs on the Costs Application, however, was not inclined to make an order that the claimant pay the former second respondent’s costs.

The full decision can be read here.

The Industrial Magistrates Court of Western Australia (IMC or Court) has dismissed a claim brought by an aqua aerobics instructor who alleged she was misclassified as an independent contractor rather than an employee during her engagement with the Town of Cambridge.

Between 2017 to 2018, the Town of Cambridge (respondent) employed the claimant as a casual aqua aerobics instructor at Bold Park Aquatic Centre. In October 2018, the respondent terminated its casual employment arrangements with all instructors engaged as employees and invited them to continue as independent contractors. Instructors were asked to supply an ABN and professional indemnity and public liability insurance. The claimant continued to teach at Bold Park until 23 August 2024.

The claim had a federal and state component, each dependent on the claimant being an employee between 2018 and 2024. 

The federal claim alleged the respondent breached the Fair Work Act 2009 (Cth) (Fair Work Act) by making false or misleading representations regarding her employment status as a contractor; breaching the National Employment Standards; underpaying her minimum wages according to the Town of Cambridge Employees’ Collective Agreements; failing to provide a Casual Employment Information Statement; and failing to keep and supply employment records. 

The respondent was a national system employer to which the Fair Work Act applied up until 31 December 2022. On 1 January 2023, the respondent transitioned to the Western Australian industrial relations system under the Industrial Relations Act 1979 (WA) (Industrial Relations Act). The state claim made similar allegations to the federal claim.  

The IMC is an “eligible State or Territory court”, with jurisdiction limited to civil remedy provisions listed in section 539 of the Fair Work Act. Allegations of false statements or misrepresentations, and the failure to provide a Casual Employment Information Statement fall outside the jurisdiction that an ‘eligible State or Territory court’ can hear. Since the IMC had no jurisdiction to determine these parts of the federal claim, they were dismissed.

For the remainder of the federal claim, the Court was required to consider whether the claimant was an employee and in doing so applied the relevant case law applicable at the time. Referring to principles from High Court cases Personnel Contracting ([2022] HCA 1) and Jamsek ([2022] HCA 2), the Court examined the working relationship and terms of the contract taking into account the following factors: 

1. 1. the extent to which the worker has the right to control how, where and when they perform their work; and
   2. the extent to which the worker can be seen to work in their own business, distinct to the supposed employer.

The respondent controlled what classes were offered, the timetable, the rate of pay and provided class equipment. However, the claimant controlled their class content and, provided she sourced a replacement, could choose not to attend and teach a class. She was not required to explain why she could not attend a class, and was free to advertise and work elsewhere. The claimant’s tax records also showed she operated as her own business, claiming business‑related expenses. In weighing up these factors, the Industrial Magistrate determined the claimant was not an employee, and instead, worked in her own business. 

Having concluded the claimant was not an employee, the Fair Work Act and federal enterprise agreements did not apply, and the Court dismissed the federal claim. 

The state claim was also dismissed because, on the same circumstances, the claimant did not show that the real substance, practical reality, and true nature of the relationship between the parties was one of employment. Rather, upon considering the totality of the relationship, including how the parties performed the contract, the relationship was one of independent contracting. 

The full decision can be read here.